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2002 SAN and NAS Report - Infrastructure, Products and Market Opportunity

October 2002 ...................................... by:- Farid J. Neema - President of Peripheral Concepts, Inc
Peripheral Concepts
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Editor's intro:- This interesting overview is actually the executive summary of a definitive market report now available from Peripheral Concepts, Inc. The complete report, which costs $2,895, identifies the major contributors to SAN and NAS success, analyzes the profile and strategic directions for a number of major contributors, and produces features matrices for several key products.
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Slow Revenues in spite of Strong Demand for Storage Capacity

Storage is sailing through turbulent waters. For the first time in over ten years, storage revenues dropped in 2001, and no significant upturn is foreseen in 2002. The general storage networking market reacted better than the rest of the industry to the economy downturn. SAN and NAS components are expected to grow between 12 and 30% while the overall storage system revenue will only reach in 2002 its 2000 level of $24 Billion, as shown in the following table

Storage spending in Billions of US dollars
1998 1999 2000 2001 2002 2003 2004
DAS 17.2 18.4 18.8 16.5 15.3 14.3 13.1
NAS 0.4 0.8 1.7 2.3 3 4 5.2
SAN 0.8 2 4 4.7 5.8 7.5 9.8
Total 18.4 21.2 24.5 23.5 24.1 25.8 28.1

2001 Storage revenues reflect the compounded effects of tight IT budgets, the availability of bargain surplus storage inventory, and better utilization of users' installed storage resources, in addition to severe price cuts. This explains that storage capacities did not follow the same trend, and continued to grow, though at a slower rate. Enterprise storage capacity increased 30% in 2001, as compared to a sustained 60% in the previous five years. The report forecasts that capacity will resume a more aggressive growth starting the middle of 2003

A number of SAN and NAS products have been deployed in production environment, with very satisfactory results. SAN in particular, has gained significant momentum

The bulk of the revenue associated with SAN is still in the disk array hardware and bundled software, though its importance decreases every year, while software and components grow faster. Both SAN and dedicated NAS system revenue increased 18 and 35% in 2001 after having more than doubled in 1999 and in 2000. They are expected to continue with a slower ramp up in 2002, and will not resume the growth rates anticipated last year before 2004.

A surge of Innovations

The economy slump has not hindered designers' ability to innovate. The past eighteen months have seen a surge in the number of well funded start-ups; over one hundred companies are identified in the report. New technological advances are about to completely change the landscape of storage networking. No vendor can ignore this movement, as some of the technologies that seemed promising last year may end up being stop-gap short term solutions

The most significant technological advances emerge in three fields that are about to converge. First, is a family of new hybrid devices offering multi-protocol low latency routing and switching capability. Data acceleration techniques form the second field, involving parallel processing often combined with grand scale silicon implementation, in products dubbed "Storage servers". Thirdly, come virtualization and aggregation engines which overcome some of the most serious shortcomings of NAS and SAN.

The report highlights and analyzes ten major areas in SAN and NAS evolution, quantifying the market through 2004, and identifying the major players. These areas are: interfaces and interconnects, fabric components, management software, devices and arrays, storage servers, data accelerators, virtualization, Content Delivery Networking, Data security, and SAN and NAS convergence

Interfaces and Interconnects

Two key trends are shaping the evolution of drive interfaces. The first is serialization, reflected in the Serial ATA and Serial Attached SCSI initiatives. The second trend is point-to-point, versus shared bandwidth topologies like buses or loops.

Several data storage and networking vendors support iSCSI which appears as the most likely long term winner. It will emerge first in small and medium businesses that have shunned FC due to its perceived cost and complexity. Though it is not expected to replace Fibre Channel, it is a serious threat to FCIP and iFCP. For iSCSI to take off, TCP off-load engines (TOE) will be required so that the TCP processing can be off-loaded to the HBAs/Network Interface Cards. TOE is a critical component.

Fabric Components

Much has happened in the areas of fabric with HBA, switches and Directors in terms of functionality, interoperability and price. Most HBA vendors introduced iSCSI HBAs, and most Fibre Channel proponents aligned the design of their new family to be protocol agnostic.

The combination of multiple protocol alternatives, network-centric system and virtualization is giving rise to a new product segment in the system network switch market. We call them multi-protocol switches, but they are also referred to as Routing Switches, utility switches or global switches. These devices combine modular, multi-protocol switching architectures with port-level system I/O routing intelligence. They have the potential to reduce dramatically the complexity of storage deployment and administration, and may be the best vehicle to SAN and NAS convergence.

Brocade and McDATA dominate the switch market. INRANGE and QLogic are strong challengers, and a number of emerging companies are innovators in the new muti-protocol family.

Management Software

Significant advances were accomplished in the implementation of reliable management of SAN. The total storage management revenue is expected to grow 17% in 2002, before resuming a more aggressive ramp in 2003. SRM and Replication software are growing faster. Replication is most commonly used in three distinct application domains: disaster recovery, data warehousing, and content delivery. EMC continues to hold number one position in open software revenue, in spite of their poor financial results in 2001.

Devices and Arrays

Along the lines of low cost RAID devices there is an interesting trend to use IDE (Intelligent Drive Electronics) interface disk drives because of their lower price. An IDE disk drive can be one third or less than the price of a comparable SCSI or Fibre Channel Several SAN and NAS companies are looking at low cost storage appliances using IDE drives to address the more cost sensitive and lower performance markets

Storage Servers

Speed, scalability and ease-of-use are prime objectives in the design of storage systems. Next generation architectures focus on improving the data processing activities via hardware in order to provide higher throughput. Known techniques are put into new usage to overcome some of the limitations of the traditional computer architecture. These techniques involve primarily silicon components and parallel processing, with additional flexibility and manageability. Storage servers and Appliances strive in making complex technology much easier to integrate into existing networks. NAS appliances penetrated the low, middle and high end markets.

Data Accelerators

Several techniques are being developed to speed up access to data, and improve overall system performance. This denomination includes architectural concepts such as parallel processing, data striping, Content Delivery Networking, and Caching; hardware implementations of functions usually implemented in software, such as TOE, as well latency minimization techniques utilized in disk drives, routers or switches. Vendors are actrively seeking partnership opportunities in this arena.

Virtualization and Aggregation

Every system vendor has implemented a virtualization solution in his networked storage architecture. In-band implementations abound, out-of-band virtualization are not as prominent, and a small number of vendors combine both in an implementation where in-bound aggregation agents and out-of-band metada engines converge. This latter approach is potentially the optimal solution. Virtualization will be widespread, often embedded in a switch, a router or a system.

NAS virtualization, often referred to as "aggregation", using a distributed file system. It is a very powerful tool that is about to solve one of the major NAS drawbacks- the management complexity of large scale NAS environment.

Content Delivery Networking (CDN)

Additional emphasis is being given to accessing data, fast and from any place. This spurs the need for placing data closer to the user, giving birth to content delivery networking, with new software to manage the content. While many factors drove a very important movement to centralization, the pendulum is swinging the other way and we are starting to see great amounts of distributed storage at the edge of the network, closer to the user, requiring vast amounts of data replication. CDN market potential is very promising.

Security and Security Management

As storage networks span large numbers of devices, and encompass greater heterogeneity of host types and host software, the importance of the security issue has significantly increased. Corporate information has become increasingly vulnerable as customers, suppliers and employees access data via enterprise portals and particularly via web services. September 11 events re-emphasized the need for additional protection and security.

Preventing unwanted accesses can be performed at the host, in the storage network, or at the storage devices. Ultimately, storage devices will have to accept more responsibility for enforcing access controls.

SAN and NAS convergence

Suppliers are involved in a race to promote their design as an industry standard. The storage and the networking industries are in turmoil, as many related investments and product activities are at stake. SAN and NAS architectures will converge in two or three steps and eventually merge. The exact outcome of the convergence can take any one or several configurations discussed in the report. Just like in any major new development, there won't be one technology that fits everyone's needs. There will be complementary technologies that address different market segments. The proper solution will likely differ by application, connectivity requirements, scalability, performance, and price sensitivity. Fibre Channel SAN has acquired enough momentum to ensure its continued high acceptance rate for the next three years. For any architecture to be successful, it will have to guarantee continuity and integration with Fibre channel.

The User's View

To verify the realism of market trends, Peripheral Concepts, Inc. conducted a survey involving several hundred IT managers. The survey reveals that SAN and NAS have enjoyed wide acceptance in the past 18 months. Storage capacity is distributed in the enterprise between storage internal and external to the server, with a distinct trend toward external storage. External capacity connected to SANs represents on the average 60% of the total installed disk capacity of a site. A significant percentage of the surveyed sites (45%) own more than one SAN and remain cautious in their consolidation plans. NAS is not as widely deployed as SAN in the population interviewed, but its growth rate will surpass SAN

Performance is first on the list of most important storage characteristics. Many managers were agreeably surprised with the performance improvement they experienced with their SAN installation. Significant additions to end users' "most wanted" list include adaptability (the ability to connect to other hardware or software modules, and to changing applications), and security. Users are now also concerned with density (bytes/IOPS/bandwidth per unit volume) and power consumption

While performance is cited as the most important criterion in storage selection, the prominent feature that motivates users to move to a SAN configuration is scalability and manageability. Large sites rate better storage utilization as the major benefit SAN brought to their operation.

Conclusion

SAN and NAS market potential remains strong. While established vendors are forced to scale down their R&D activity, several start-ups are actively building innovative tools that promote new solutions, and constitute a threat to the traditional architectural concepts. Vendors are advised to partner to acquire new technologies, while opportunities for partnerships are still widely available.

The complete report identifies the major contributors to SAN and NAS success, analyzes the profile and strategic directions for a number of major contributors, and produces features matrices for several key products. The report was issued in September 2002 by Peripheral Concepts, Inc., a leading consulting firm specializing in storage and storage management. Write to reports@periconcepts.com or click on the links for more information.

...Peripheral Concepts profile

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